Stock market hike ‘artificial’

Kathmandu, November 30:

The Nepal Stock Exchange Ltd (Nepse) had gained 28.72 points between November 27 -29. A rise, market analysts termed as, ‘artificial’.

Most industry watchers agreed that more that the euphoria over the peace accord signed between the government and the Maoists, certain unfounded ‘rumours’ have led the bull run in the bourse.

Rewat Bahadur Karki, general manager of Nepse told The Himalayan Times that the boom in the stock market is just artificial as there is no added substance in the performance of the listed companies.

Karki informed that the only new thing in the market has been the new Company Act w-hich has necessitated banks and finance companies to incr-ease their paid-up capital to Rs 800 million and make it man-datory on them to hold AGM.

A possible reason for the hike in share prices is various companies having announced a number of ‘rights and bonus’ shares. In addition, time for AGM of many firms is also approaching, dangling the possibility of new bonuses, market experts said. The new-found peace in the country has also sparked new hopes of revival and regeneration in the market, said Karki. However, according to him, the market can not spiral out of control due to the introduction of ‘circuit breaker’ in the stock exchange.

Karki also said that manipulators are strongly rooted in the stock market and take advantage of such situations. “The hike in share prices is taking place without any understanding of technical and financial strengths of listed companies.”

Stock market analyst at Nepse, Pramod Bhattarai termed the current market trend ‘humour-driven’. There is a need to understand the fundamentals and performance of the listed companies, he said.

The bubble bursts?

Kathmandu: Nepse index, which reached 492.46 points on Wednesday, due primarily to a hike in sha-re prices of banks and financial institutions, drop-ped to 486.19 points, a decline by 6.27 points, on Thursday. The rise till Wednesday, was worth 28.72 points. Despite war-nings from stock analysts, a buying spree had taken market capitalisation to Rs 124461.58 million. Total traded amount from today’s listed companies stand at over Rs 60 million. Total market capitalisation amounted to Rs 122,878.76 million. — HNS